ML19329E716

Brief Opposing Westinghouse Motion for Reconsideration of Order Denying Motion to Quash Subpoena.Certificate of Svc, Info Disclosure Agreement,Mm Cherry Affidavit & Portions of 720108 & 0301 Hearing Transcripts Encl

ML19329E716
Person / Time
Site:	Midland
Issue date:	03/06/1972
From:	Cherry M CHERRY, M.M./CHERRY, FLYNN & KANTER, Saginaw Intervenor
To:
References
NUDOCS 8006170867
Download: ML19329E716 (42)

Text

.

+

N 5? .

j' f . .

.f rA Ht :-

gq -

• PhtL. 5 6!li, , g 5D ~2g<g gg L,I ,

k, : ..

/ MARCl! 6, 1972 CW . . , /

/-UNITED STATES OF APERICA ATOMIC ENEPGY COPflISSION 11FTORE TEE ~ ATO.VIC SAFETY 7.ND LICENSII?G DO7!!D It: Tiil; MATT!!P OF )

) DOCl;isT 1100. 50-329 CO!!SI'FVi>:: 1 t r. ']:1? COP'l/NY ) 50-330

-f*1DI.T.la l')./ uT t M3 TS 1 7.ND 2 )

BRIET OF E7tUI,AM VI.LLEY ET AL. INTERVENORS It! OPPOSITION ,

'J O FESTJUrPOUST LLECTRIC CORPORATION'C l'OTICM FM N;CO;!PIIERT. TION OF ORDER DENYINC-

i. ! FT1;:r !TI:SU ' .R t'OTIOM TO CUASl! THE FilEPOENT-7 MT PODiiC.TTON The- l'r :t i nol.oin r- 1:r.i e f- han d. tronn L rt t r el that itn I

II <:al . to r.iu; < nt in an incredible os it ].il <:n us to believe 1 'a 1.OCA in - and both arguments are without foun6ation.

Pirst. of a33, the nyth of any sensible or reason-

!:19 clair, cf proprietary has been exposrd; it is clear t hat Westinghouse is takin_g the position that it. is entit led tin withhold the subject rerorus 1 vithout regard to their

( ' t. r. i c l s a r , , 1.*' s.l y l eDCDUGO $t~Claimt Oli aura of COnfiden-tiaJjty. At. por:c 4 of its Brief, Westinghouse st:aten:

l'or c dr crip t.icn of the reports which are the r.ubject of L l:* . i r ud i rg t > t t.or , nec footnote 1, pac'e 2 of tbe restinct- -

.nn .. 1:r;cf ' 6 ited January 35, 1972, heresft.cr reterred t.o

ti e V d L.j : rhoure Dr.icf. .

L8006170

t 2-

"If inqui ry is to be made inte the pro-prietary riatters of Ihe reportn, f.h e tent to be applied in whether 1.he r:n tr rin '

.in cust omar.ily held in confj dence by the originator. . ."

Ind, although t:cstinghouse admits that the Beard requested i t to - filc and serve arguments and supportine data (U. P, r . ,

p. 2), it 3:s clear that no supporting data has been suppl.ied.

Thuu, 't he t'ciserann affidavit is no rore than a statement. of the Jeral test anserted by Ucstinghousc. fir. Uciserann's rcrarhs are nothing more than in the naturci of " sworn

] coal t n ti r:ony . "

f'orco"cr, when one reviews the original Certifi-ca t ion ol10uentiom: to'the Appeal Board dated bucunt 10, .

1971, the'.ctaterents radetby the[Doard with respect to the iest of proprictnry c1carly reject out of hand the Westing-house trc t. Thun the Ecard stated (and later adrittcd the

'obv.ionn that the ntatenent won without.any undorlying ev.iden-tiary nupport or developed at a hearing):

_"The information seems clearly-to have bcon the product of Uestinghouse rencarch and development, and Uestinnhouse corpetitors wou]d ceer,liholy to reap at leact nove acfvantages from- the disclosure of 'the i .raterial."' (August 18, 1971 Certification, page 5. )

.fhui, en .itn I'otion for Reconsideration, Ucstinghouse aar.erts a .Iconi 1 entubich cocn cven further than the Poard went in

' Aiegus t . ,

T l < g s

b_ , c-...L . . . - . . . .. . _ . . . _ . . . . . . . . . . . - - - 1 a x -- _

B y . ,

a .

• 4 Morcover, when one understands that the Arpcal Ecard in i ts 'rtemorandum and Order of September 21, 1971 erroncously .

concluded that the Board had made an evidentiary judgecnt as .

t'o 't. lie insue ni proprietary, the 1:oard prce.pt..ly innued a nub- ,

peona to Ucntinghouse and ordered a hearing'on the merits of the c3 airc.. Vcatinghouce's Drief essentially argues-that at such a hearing, no onc could dispute the aura of confiden-t..iaJ J ty and :o as a-ratter of law, it is entitled to relief now before the hearing. In order for Westinghouse to prevail now, it. rust be correct in its legal test (which it i c not)

, and t hr- Udi nit. ann A f f j d.ivi t. nust. he unconten ted (whi ch i t i s liot )'.

. Viewed in the proper context,-the writing of the Ucrtinchouno 1:rief as vc11 as the requirement upon Inter-venorn t.o prepare and file this Erief has been a waste of tiicc . We are now r. ore than eight months after the original

- clair cf propri.etary and as a result of maneuvers and ohfus-ca t j <,s.1.y re sti.inghnune, uc are at a point ubero the incur ren a i n i tig (and indeed the only j ssue raised by the Westi ng--

houne c. lair core conths ago) is whether,'in_ fact, (a) the infoiration centained in th'e reports is protectable; (b) whet her, . i f protectable, its release would result in n '

defj ned corretj tive injury = to Festinghouse; and (c) annuring

~e 1 cyn i tive ennwer as to the first two itorn, it is in the e-e h W 4+ h ow h

9

.h . *

(: .

public interest,2 upon appropriate balancing to sustain the

- claim of proprietary.

Westinghouse ignores the applicable law and trics to foster and shape a test of proprietary. insupportable as a mat i er of lau and, in fact, a test resulting in Westing-house In ing t he judge of i ts own cause.

We shall denionstrate below that the appropriate test as to whether information is proprietary encompasses an cxanination of the information itself, its relationshi})

to the open literature, the competitive effect, if any, of itu di.sc]onurc and the public interest in having the infor-vntion ! avail.hble for. public scrutiny. Accordingly, whether i: , .  ! i l t he appreq,rj ate test; is the .tradi tional common law privi ;

~

J ege of protecting trade secrets (the test vc belicyc appro-priate), or vhether the test.is a function of an interrreta-tion:of the Freedom of Information Act, the results are 1:arallel. 'That is, Westinghouse may not gain the protection ,

2 . . ,

In i bin < onnection, vc call' attention . to the Appea] Poard'n deninion of f:ept en her 21, 1971 at pagre 9 rhere it states: >

"Jn ei.ther crr.e, in censidering e rectuent for pro-duct.iore of proprietary information, the I.icensing nooid should weir'h the detrirent al ef fect.n of dis-clonure against the der.onstrated'Tieed fEr pFoduc-

• tion." (Frphasis suppJicd.)

It .in clear that the Doard can weigh nothing without a j

-hcaring. -

l l

l 1

1 l

l

-m____<a_.___.__m_ -

k

5 i ,

. ,=

t it seeks without a factual examination of the information itself and the effect of its disclosure vel non.

Although Westinghouse spends an inordinate amount of titre in it's Brief . arguing for a demonstration of good cause, relevanen, and need, the only issues before the Board are the appropriate test of proprietary and the timing ~of a hearing as to the merits of Westinghouse's claim of privi-3cge pursuant to that test.

There can be no question that the reports sought are relevant. The reports deal with a generic area of nuclear safety, that is, iodine spray removal systems and chenical additives thereto; and it i's clear that Intervenors are not scePing the documents to make a comparative 'investi '

~

gation. This was made clear in our Deconber 10, 1971

.Renponne to Westinc house's Motion to Ouash, fiorcover, both the Board and the Appen17 Bopr( have already hold that the reports are relevant. Thus the Board in its Certification of August 18, 1971 stated et page 4:

"There can be no serious question of relcyance in this case [with respect.to the subject docurents). . ."

And the 7ppeal Board stated at page 3 in its September 21, 1973 Order: '

"If the applicant sustains its .kurden of proof in this regard, it vil] have satis-ficd those recruircrents and .it will be utmecensarv to cor.si6cr the sorcy nynter-of another reactor'as proposed by Inter-vennr."

l

- +

r-

=

> c j  ; ,

The corollary of the Appeal Board's statement supports our posit. ion'that one of the rothods available to Intervenors to demonstrate that Applicant has not sustained its burden d'

~

\

in to chow a contrary' conclusion by another vendor. This i

can be done without making any comparisons but by merely

]

challenging the conc 1tJsions of Applicant by the introduc-I

' tion of a co.'.rary position.

Viewed in this light, c2ucations of good cause and

' relevance have already b'een decided in favor of Ihtervenors.

Innof.r a .

need is concerned, we have two correents to irahc.

l'.i n:t of all, Dr. Cordon Burley, the eminent authoc.i t.v on iodine spray ren nva l et the Atortic I:ncrgy Ce :-

misn.itu, testifj ed in the Point Beach proceeding with recrect to the docutacnts under consideration here that as a scien-tint, in order to have a complete and total understanding of the iodine npray rcrroval system, it was necessary (i . e_. , necd) t o how acct nn to I ht- t?ontinghouse report n here cla imed piopr.ictory in addition-to the open literature. Thun, Dr.

' nurley van asked the following gucationn and gave the follow--

ing annvors at pages 2194-95 of the Transcript in the Point De ; ch ' prnecedinct, Dcchet No. 50-301: '

' O. No, that.is not my cuestion.

Inyourresponsibilityasinchargeofthiic general.i ked progran , Jodine npray rerooval','

e, 4 4

e

,b.

• I J *?e

, /

am % I b

i. _T = - .. , .. . . _ s

e '

you are continuing to update your knowledge of that.

Have you restricted yourself in:

your thinking, in understanding.this whole, field, to just the open literature or -

have you also considered the Westinghouse.

and B&W work? -

A.

I have consi'dered all the Dhw and Westing-house reports insofar as they apply to their particular syster.

Q. Nov, if I had need or a scientis't had need to make a thorough understanding of the state of the art aslof today, to try to rev ow -

4 judgrents made hy the A1:C or various of the vendors, would it he valuable to hava, in addition to the open literature, the informa-tion contained in the Westinghouse and B&W reports, if I wanted to have a total under-standing?

A. I would say yes.

Insofar as "nced" for the documentn is concerned ,

Intervenors contend that they are entitled to h ave access to

-info'rnation at least as gr eat as was availabic to other per-sons whose opinions and viewpoints are being consider e nd i thi s' I! caring.

Porcover, because of.the nature of a public

A t e 5 s .

hearing, Intervenors are entitled to all assistance and informat. ion which is relevant, so that their case can be Finally, prepared in a reasonable manner of their choosing.

if Dr. Eurley would like all of the information to be used in hin analysis, then the Intervenors can be accorded no lesser right.

Fccondly, we believe the question of need is a straw ran. If the reason supporting a decision of no need is that the inforpation is availabic in the public litera-ture (an argument made by Westinghouse and apparently adopted by the Ucard), it follows under the correct test of ,

proprietary that the material is not protectable because of the fact that it is duplicated in the public literature.

Once relevance has been deronstrated (and we bc3.icve it han been), the question of need falls by the way-nide. Thun, .if need is at issue, we believe that the reali-ties of the situation and Dr. Eurlcy's testirony satisfies the requirements; on the other hand, under our view of the law, if we lose upon the issue of need becauce the informa-tion in duplicated in public literature, Westinghouse must lanc its position because information in the public domain

~

cannot be proprietary.3 it 3l 'inc1 jy, we wou]d point out that if Freedon of Informati.on net 1 rinciples are to be applied in this proceeding, the t . guest ion of need is totally irrelevant. The Act does not place any burden to demonstrate a need for the information upon the roguesting party. See ta'ashington v. Cameron, 411 l'. 2d 69 6, 705 (D.C. Cir. 1969) where the Court stated:

. . .Under the Freedom of Information Act, any-ncmber of the public is entitled to have [the information] vithout regard to need." 3 it we.uId be a curicus application of equitv that Intervenors vould ).e enti1.lt d to 1.he information if they made a Prec-dom of :In f ormat ion Act request wi thout a nhowing of 'need, s;he n .n. .in a licarj ng where Intervenorn have a valid inter-ent t o proter:l, they are limited in their access to infor-rat. ion by a recre stringent standard. This line of arg.u-ment obviously reveals the suspicion that if the Rules' of Pract ice in Part 2 attcmpt to embody Freedom of Information Act principlen, while, in effect, engrafting an amendment, then they are illegal. We vould also point out in passing that'the Freedom of Information Act places the burden of prcor with respect to withholding information upon the acenc y or the bolder of the- information. 5 U.S.C., S552 (a) (3) (19 72) . Thus, to the extent that the Rules of Pract ice or Part 9 switch that burden around by placing an a f f.li scat i ve obli gation upon Intervenors , the 11ules of Pract i ce or l' art 9 must f all . We raise theno points only to nupport our.arguir.cnt that the "necd" isnue is a red herri ng.  !!owever, we also state that if the Board bottoms a decision in favor of Westinghouse upon the basis of  ;

need and burden of proof contrary to the Freedom of Infor- i matiou act, a curious, and, we beli eve, illegal result i wi13 have been reached.

e * .ms . o .e s m. . e,

5 Tile PPPEDOM OP INFOPPATION ACT IS JNAPPLICABLE.

Ti!E PPPPOPRIATE TEST TOR PROPRIETARY PEQUIRES Tl!E CLAIFdANT OF TIIE PRIVILEGE TO PROVE THIT - '

Tile INFODPATION SOUGHT TO BE WITHHELD IS A TitADE SECRET UNAVAILABLE TO OTHERS SKILLED IN Tile ART, THAT ITS RELEASE WOULD HAVE A DEFINED AND SERIOUS COPPETITIVE INJURY TO THE CLAIf! ANT AND TIIAT ON BALANCE (ASSUMING SUCH INJURY) THE WITUllOLDING OF PRODUCTION IS IN THE FUBLIC INTEREST The Freedom of Information Act applies when one

enkn documents from an agency as a m:2tter of r.ight and not

.in thc context of a litigated matter. While the Prcedom of Inforration Act nay give Intervonors rights to scek infor-mation (whether they are within or without/a litiaatedcontrovercy), the matter under discussion here is a discovery matter wherein Intervenors moved'for relevant information in the hands of $

i nhn-pt.rt.y witness pursuant to traditional and common law pr.i nc.i pl e:. o f fai rness .

Intervenors' ffotion and the lloard's issuance of the suboocna was rade pursuant to section 2.720 of Part 2 of the Rules of Practice. That section states in pertinent part that:

"The officer to whom application is made may require a chowing of general relevance of the testimony or evidence sought, and may withhold the subpoena jf such a shcw-inq .i n not made, but he shal] not' attempt to determine the admissibility of evidence."

The subpoena was issued because a specific showing of rele-vance van made' and acknowledged by the Board.* Mo reove r ^, the

• ~

r<'e m!p n , p. 5

Board'may never have to determine admissibility since Inter-venorn at the moment are only requesting that the reports be produced and that Intervenors be permitted to use them in the context of' cross-examination. The question of admis-sibili ty will only arise if Intervenors at a later date choose to introduce the reports or a part thereof into evi-dance.

Section 2.720 permits the person subpoenacd very limited rights. Thus, he may move to quash or modify. the subpoena j f it is unreasonable and requires evidence not ,

relevent to any matter at issue, or he may ask for"the sub-porta to be ennelit. inned on just and reasonable terms, t'estingliouse has not taken either of these routes but rather '

is trying te exclude altogether all of the reports. -

The subpoena has not been demonstrated to be unrearonab]c, although West.inghouse has rindo the bare claim.

, J t .is no burden upon L'estinghouse to produce the informa-tion, and, in fact, all it has to do is mail the reports to ,

Intervenors. We cannot see any basis for a claim of .

T unreasonableness. Additionally, Westinghouse has not' ashed for a denial of the subpoena upon any conditions, such es, for example, that the persons present during the hearing when the reports are used are sworn to secrecy.

Wentinnhouse cerely makes the broad claim that it is a powerful factor ir.the nuclear industry'and just does not want anybody poking around in its business.

It is well known that the specific secticn under discussion, that is, section 2.720, is almost a chines'c copy of Federal Rule of Civil Procedure 45 dealing'with sub-pen nan. Under the Federal Rules of Civil. Procedure, t.hc burden of prov.ing that a nubpoena is oppresuive or unrearon-able .is upon the party to whom the subpoena is directed.

Coodtryn v. U.S., 369 F.2d 166-169 (9th Cir. 1966). Indeed, a nubpacna can on.1v be cuashed upon a showing that it is unrcoconable or oppressive.4 Ibid; and Sullivan v. Dickson, 203 P.2d 725 (9th Cir. 1960). Moreover, the burden is part irolarly heavy to support a motion to quanh as contrasted to notr 1; ore 1injted protection.  !!orizons Titanium Corp. v.

I: ort on Cottnanv, 290 P.2d 421, 425-6 (9th Cir. 1961) (a case which yacated an order auashing a nubpoena and ordered

}ireducticn even th'ough the traterial sought was " trade secrets" and von sought by a competitor); restinchouse Electric 4

Junnier an Ll'oro is any burden or opprenniveneca in requir-inej Mentinghonno to nuhmit the reports to Int crvenorn, ve call :-il tention to the testirrony of Mr. Weiscrunnn g.ivon at -

the W:L. ion 1;CCS IIcarings, Docket No. RM-50-1 (Tr. 3828-3839) that vestinghouse has a general policy of regularly re l .. on.i no repor to cl aimed proprietary in the . ordi. nary coui na' of its business, albeit pursuant to protect.ive agree-nent n. The burden b*estinghouse claims in obviously that  ;

intervenors reauest the reports without entering into a  !

l propri.ctary agreement. -Viewed in this light, the l'urden -

argur :nt is no reoro than additional but trannparent support for M"stinghouse's contrived legal test on proprietary.

m

4 Corjgration v. C3 tv of Burlington, v err onta 351 F.2d 762, 767

' (1) . C . Cir.-1965); and 5 Moore's Federal Prectice, lia r . 45.05.

Westinghouse thus argues that reloaue of informa-tion in the face of a claim of propreitary in oppressivo.

If it fails to make proof (which it has), the Westing-house rotion raust be rejected. .

At cornon law, persons who have developed unique infor;'a tion , that is, information in the nature of a trade necret, were entitled to appropriate protective measures in connection with its release during the course of litiga-tion.

There vas and g no absolute right to withhold 'infor-reation relevant and necessary' to 'a hearing, and the most a party suicpoenced could claim is that it is entitled to some g carcra relief or some procedure whereby co:,petitors are sworn to secrecy and agree not to use the information dis-cloned.

T he mont Westinghouse could over gain, if it

.in nur: cess ful in its notion and is permitted to submit. . .

fact.ual nupport, in some form of g carora protection. Sec -

Cohn and Zucknan, FCC v. Schri eber: In Camera rnd the Admin-intrativo Acencv, 56 Geo. L.J. 451 (1968).5 Sco 31 also footnote 13 at page 28 of the Westinghouse 'Drief. .

in obvious that Westinghouno in aware of the lack of "thleti titv" of 1In

)

1 ocla] argunent.

_g g a. I "

=

L&s._ -

~

. j Our legal position is quite simple. Under the applicable law,.unless Westinghouse can demonstrate that its information is in the nature of a trade secret, that dis-closure of the trade necret would create a serious and direct'coinpetitive injury to Westinghouse, and that on balance the public interest would be served by withholding the information, the documents must be produced forthwith.

A. Trade Focret - Proprietary In order to be a trade secret and entitled to pro-tection,- the .information must exhibit a quantum of novelty and or i <s.i nal i t v , be unpublinhed clncebere, and providt' a cer; c'.itive advantage over compet.ilors who do not know or i

unO i l' .

There are three well recognized tests applicable 4:

to the r;atter at issue. Prcof that Westinghouse falls into any.one of the categories is sufficient to reject the claim of prceprietary. In fact, the docurents at issile fall into all

-three categorics.6 These are:

=

In the stating of the applicable legal test, Intervonors are alno setting forth a factual argument in the nature of ad-raissionn by the Regulatory Staff. and Westinghouse, albeit in o t.h e) proceedings. We make this factual showing not because un b 1ieve. the lioard can decide the matter (unless it' rejects t.be l e :t inghouse argument) without a hearing. Rather, we make~ ibis arcument to demonstrate that the " facts" contained in tl.e 1;cischann Affidavit are not representativo of the con-trol.1ing factn and are hotly contested. We believe, however, that :be fact :. veh ich vn have subraitt d are in the not.ure of

.ayhni: :.ionn _ao. innt Wut inghoune. and I he !?ngu Iat ory f;t af f and t hun r:.9 l he unrrl by t.hn Itoaril to'rul against Westinghounc on :lla neritn and without a hearing.

i 1

< l

~

.i-

1. Matters of public knowleduo or of general know-ledge in an industry cannot be appropriated by one as his

.necret, and widespread publication and advertising will dos-

. troy any right of action to preserve as a secret.that which is dicc1oned. (The starting point is always whether, in _

fac', the information is a trade secret. Van Products Co.

t v.

r enc ral 1.'c]di na, 147 U.S.P.O. 221, 229 (Penn. Sup. Ct.

W.it 1 %5) . ).

4

~2.

To have a protectable trade secret, a techno ~

i

?

logien1 developrent 'or discovery must consti tuto a contribu-J d tion hevond application'of more ordinary ski.ll. Thus, it U

must . i u of' a character which does not occur to pornons in 1.bc trade with hnowledge of the state of the art or which

.cannot be evolved by those skilled in the art from the thco-t ret i"al desci ipt ion of the procenn, or comp.ilat. ion or com-i, pendia of

, 3.n t orva t;j on or knowledoe.

Sarken Tarzian Inc. v.

e j-

.. A E.u!!,io,,gLryigs,", I nc . , 166 P.Supp. 250, 255-259 (S . D . Ca l .

1958).

i 3.

Techno]cgv obblished'bv. third narties in 4

the Jiterature or matters generally.known or known'and used i I?y et bhrn in 1.he industry are not protecta..lo. .S a rk os, 1 . - -

T. i r . i '. e n , nisjr,... t d ,

. ,?-

?

A-' sipple exploration will demonstrvtc that Westing-  ;

i houce fai]a to meet any of 't.hese welJ recognizcd tesla of i

)

d -

t i

..: i. i I:;- ,

y s',-- v

. --c p.

t. i iid e - ::e creL-proprietary.

First of all, Westinghouse disserinates the subject-reports broad]y t'o the utility industry and to the Atomic 1;nergy Commission. The Atonic Energy Commission regularly confers with national laboratories in the course of its busi-

- ncsn which provide a further dissemination of the -informa-tion. -Forcover, as Dr. Weisemann testified at the'!!ational 1CCS I!carings, Postinghouse regularly submits reports claiiecd_propreitary to potential purchasers, that is, uti1.iiien who arc evaluating whether to purchase a Mcsting-heu:a r6 actor or a corw:titor's reactor. (Cen generally m i nt 't nn tenti nny, Doche t 1P1-50-1, Tr. 3693-39' i2.). West-inohouco is charcsod with the knowledce that utilitics are mahino evaluations in order to determine which reactor they

-will: purchase, and Westinghouse is as a matter of law charaed tha t the lotrical consequence of its busincHs practicos.

The .information contained within the subject reports are patters of general knowledge, are known and used by others in the industry and were not developed by Westing- ,

l

~

houne. Marcover, anyone with the knowledge of_the state of l 3

th6 art could reproduce the_information contained in the reports claimed proprietary from thc_ description of the prece n or f ron a crepilation of publicly _ available infor-L i&it i on '.nid hiie,wl edrJr . , l

?

m1

, t 0 -

Tho' reports under consideration here were the subject of discussion with Dr. Gordon Burley during his cronu-exanination at the Point Beach proceeding (Docket No.

50-303).. 7.t that proceeding, Dr. Burley was asked whether the.information contained in the subject reports was unique, apecifically developed by Westinghouse, or novel in a ncient .i fic sonne, or, given first principles, one skilled in the at t could not derive the inforroation contained in the report n. With respect to each matter, Dr. Burley said "no" and ptd nted out that much, if not all, the information con-tnined in the reports was available in one form or another in the public literature.7 See transcript of proceedings  ;

^

of 04:nuary 8, 1972 in the Point Beach protecding, Docket 7

1)ur.i ni; Dr. Durley's cross-examination, WCAP 719 8-L enti t] cd "Evaluatic,nn .of Protective Coatings for Une in Pcactor Contrinn;ent" wan riot discussed. !!owever , it is clear that' if he had been asked 'the sarre questions about that report as hc was asked about WCAP 7153-L and FCAP 7499-L, he would have como to the sarse conclusions, that is,'that there is no dincovery or novelty contained in FCAP 7198-L and that any 1 rnon skilled in the trade could duplicate the infor-niation contained therein. See ORNL-TM-3104, " Evaluation of 1;ure,;enn-Forber, Paint Corpany Protective Coatings for Nuclear Pl ant /.ppli cat ion," January 1971; ORML-TM-2412 T art V, "l><*ni gn Unn::J de:rationn ~ for Pcactor Containn ent Dpray Eyn-t en :.: Pi ot reli ve- Coat.ingn Tentn"; and " Nuclear !!afety Pro-gran /anual Prot!rcus Poport: -for the period ending IJocen.-

.ber-3), 1969,.OPUL-4511 (Ma rch, 19 70) ; and a nimilar ,

repuri for tho year cnding = Decerber 31, 1970, OPUL-4647 -

(feay 1973), all of which are public documentn containinct rauch , i F not 911,. of then ' o-called "necrot" in'ornation

- in W/.P 739H-h.

i

.g .

e , +-

,y n*

?,G; i .

4 .

's. .

,V No. 50-301, Tr. 2170-74, 2178-85 and 2192-95.8 We refer the Board to a series of cases and law revice articles which support the positions taken herein.

Sco FfC v. Schricher, 381 U.S. 279 (1965); Lear v. Atkins, 395 ti.S. 653 (1969); 1:anc, Limitationton i he f.aw of Trade Secret,n. 53, No. 3 Journal of the Fatent Off3co Fociety 162 (March 1971) and cases cited therein; Gellhorn, The Treat-ment of Confidential Inforeation by the Federal Trado Com-missi on; Pre-trial Practices, 36 Univ. of Chi. L. Rev. 113, 119 (1968-1969); Cellhorn, The Treatment of Confidential infor M,i.on by the Federal Trado Coracincion: The Heari ner,

.I 16 (f . I d . 1,. Rev. 40) (1960); Cohn 6 7,ucico'an, FCC v.

!'ch r i.el ae r ; In Carnera & the A6ainistroLive Avencv, Geo.

L. J.-451, 462-4 (1968) & 20 Administrative L. Rev. Articles beginning at pages 1, 49, 55, 249, 455 (1967-68).

14 Ccmpetitive Injury

. If Westinghouse is successful in making a factual showing of- proprietary within the limits of the test set fo r t h .i n A . above, it inust then demonntrate that relcanc 8

Por- convenience of the Board,- these transcript pages ,are rolsroduced hereto as. Exhibit A.- Counsel for Mcstinghouse was.present during Dr. Burley's cross-exanination and did net choose to question him on this issue. According-ly, vestinghounc has aircady had "a day in court."

.* t*

f 1

of ihe protectable information would result in clearly defined, serious competitive injury. The logic of thin recs irement is inescapable. A privilege whic.w orevonts the free and open consideration of information in to be nar: owly ceni:s t.ru :d t.o protect only valid int orcuts of- the ho]c!er or originator of the information. The priviJege thus attachen in order to protect the holder or originator in advance frora injury which may later prove to be irrepar-able if the jnformation is disc 2osed. It follows, therefore, that trade secret infortration, the disclosuro of which for one reason or another vould not result in any injury, in not prol eci al.le since , an a matter of law, t he holder or or.iriinat or dr.en not need the claim of pr.ivile<rc to protect hin from injury.  :

It is our position that Westinghouse must deiron-strat e that the c3 airred proprietary information in of a nature so sonnitive that its release would result in a clearly defined jnjury to Wentinghouse in thn parlatplace.

Vient inghoune .mnerts that conclusion in the. Neinemann M t'.ii.:.vi t but renhen no effort to offer the Board or t he partion any nupporting data upon wh.ich to analyze the con-clu :f ran. Soo a caso directly in point, FCC y. Schrdibor, 3 PJ l' . r. 2 79, 295 (1965) where the Suprcro court in on

- idr nt.' cal situation rejected the argo: rent of the person M

,g-.

., z y-,

subpoenacd and stated: "!!c factual showine was trade; there was only tbc argurrent."9 Thus the argurrent contained in i he b .i nevann t.( f3 davi t, that is, that the 'inforrration i n con f.iilential anel that its rc3 cane would involve corcpetitive injury, was rado by Schreiber some years carlier. The Supreme Court affirmed the FCC's rejection of the Schreiber a rgut. cn t . 383 U.S. at p. 295-296. Soc also Gellhorn, op._

,c}_t . qjlm,a,.116 Univ. of Pa. L. Rev. at pp. 411-422.

Upon bearing, if Festinghouse choonce to introduce evi ch oce, the tent of competitive injury is rigorous and tho bonl< n .in iq ,n t.be t'laimant of the privilege. Davin, i

h!ui e . ::t ra t .i ve f .vw , sect.icn 8.09. The test in that one must l!

(Irwnn,1 rat.e that a clearly defined and scricus injury to.his 9

" As a tratt.cr of f act, it is obvious that Westinghouse js vcry chary to paho such proof since their legal test is f r an .C onle]y in terms _of the coniidential nature of the i n fr. = mt.f i on . In a sense, therefore, the Mentinghounc tent .

Jr i <.nnint,nt. On the one banel, .i t urrp : that t.he releanc of ii.i .or.e Li<,n would renult. j n competi t.ive . injury but en the o t 1. - h a nc.8 , .i t carefu))y avo. ids nah.ing any proof in support.

of I ha t bl .me! ant.ertion. Compare paragraphe 8 (a) (b) (c) of Ibe t?. j nerrann /.Cfj davit with the nt.atement of ihe legal t.en t et par,en 4, 22, 23 and 24, West.inghouse Brief, where Mentinghouse annerts that the question of whether the reports are croprietary nhould be resolved solely by exr.winetion of whet ).or the c:ocuments are custonari3y ' held in confidence by Went;nghouse. 1t does not follow that dinclosure of i. n fo rna-tion -in docur"ents cuctenarily held in confidence will aute-mat. ion]3y renult .in cottpctitive injury to Pentinghouse or ec:: p. t i tive . advantege to any of its competit ors. Thus, even ui d.' t 1 e t'ent i niqhounc t ent, one ir.unt analyze the coirpeti-t i v. c a 1. ci .

.i

business would result from public disclosure of the infor-i i

1:wtion r.oucht and, therefore, good cause exists for hold-ing such infortnation confidential. Graber Pfn. Co. v. Dixon, 223 P.:upp. 1020, 1023 (D.C. D.C. 1963) cited wi th approval by the Supreme Court in Schreitor, 381 U.S. 279, 293, n. 20.

(Sc.c also the excellent discussion in Cohn & ZucPman, op. cit., supra, 56, Geo. L. J. at 462-64 and tbc cases c.ited therein.) .

C. Uithholdinc of Information In !!ot In the Public

' 1rterest iF upon hvaring West.inghouni' demountrates that the

..inforniation contained in the reports rjnes to the height of a trade necret and proves that releasc of the information vou.1d result in a clearly-defined, serious competitive injury, Festinghounc nuat also prove that the public policy for free and open hearing is not subacrved by the withholding r,f t h <. .i n f orrt tion .

Wo loivri car]icr alluded to the Appeal 1:oard's ,

Pccorondum and Order of Septernbor 21, 1971, which correctly ntaten that n' balancing test is required in the production of internation claimed proprietary. Sec Mer orandum of I.ppea J Doard in Docket No. 50-329 and !!o. 50-330, Septem-ber 21,.1971 at page 9. All of the law review articles c.i teil above and,f,CC _y_. Schreiber supports that poni tion, pl u;. t he- po::i t icas t hat pr ivat e intrere :1. in not. t o be accorded

.t any great weir,tht when the public interont is c1carly de l .i ned and i napartant . We urge t.hc Board tr> review the

~

prineiplcs etJaodied in those authoritics.

We would add the following.

1. The AEC is required to hold a public hearing at the construction permit stage. The legislative history of the 1962 7.mendment to the Atomic Encrgy Act makes it clear t hat a conntruction permit hearing wan made m.andatory be canne of a Congressional determination that the public shou tri be f,ully informed about nuclear safety. Additionally, Cong2 ens set forth a policy concerning the release of scientific infoi.tcation, which policy is contained in Section 14.1 of t.hc tet. In portinent part, this section provides that the fol. lowing principle shall govern the Commission in the i c lenne c,1 information: *

"Tho dinseminat. ion of scient iric and technical information rclating to atomic enercy chou]d be permi.tted and encouraged to as to provide that free interchange of ideas and criticism which is essential to scientific and industrial progress and public understanding and to enlarcyc the fund of technical information."

'1ho polalic policy. at ntake here is that declared by Congress when ~i.t provided for mandatory public hearings encouraging the i ree diesemination of information. The privato interest at.nt.ihn here in that of Westinghoust- which claims, without ,,

factu.el support, that its information, acknowledged to be

.g

- )

+

, i available in the public literature, must be kept secret

, because it has determined that it should bear the stamp of confidentiality. The notivation behind the idestinghouse clain is not clear. However, a comparison of the interest it scel.n to protect, based upon the state of the record, with the principles inherent in the public policy toward public dinclonurc clearly demonstrates that the Westinghouse 1onition in gross.

While we acknowledge that under certain, narrowly def j ne:d ci rcunctances a trade secret having significant com-

- pot:3 tive advantage reay bc so protectable that its disclosure would not be in the public interest, we fail to .sec, bow-ever, how the subject reports fall into such a category.

2. Moreover, in light of t he acknowledged corr-

,. peti t .i ve n.i tuatJ on in the reactor-vendor marhetplace and assunintt that the documents are trado secrets and that their release would create a corrpetitive disadvantage to Urntilighoune, we contend that it is in the public interest to eu no.

An. ailditional, well recocinized public policy of I h r.'Ito i t e i! ::1 .il i n a t innue hnre in the nnhant:innent of coinpet i-tion. This principlc is embodied in the Shermen Antitrust Act *

~

and juelicial precedent. 15 U.S.C. S'll and 2 (1972); Lear v.

A t 1: i. n n , 395 U.!1. 653, 677 (1969) (concurrino opinion of ilunticon 131ach and Douclas and the Chief Justico) s t

. y

s It is our position ^that the dominance of Westinghouse in the reactor marketplace is such that it is in the public interest to release the subject reports ove'n if their dis-closure would result in competitive injury to Westinghouse and the' reports are trade accrets. Stated another way, this 1:oard r.ay not uphold Ucstinghouse's private interent if in do.ing ::o .it enhances Festinghouse's apparent ronopolistic marl.et pouer.

O Public reports by the AEC of rarhet statistics -

in tha retector industry derronstrate that Westinghouse is far and away the Icador of the industry. Depending upon an ana3ysir of the geographic and product markets, WesLjuyhuuse may v.i.i vel 1 havc and be exercining i 3 local nio toply power .i n viole.t. ion of section 2 of the Sherman Act.

As of the end of the calendar year 1971, of the four ma:ior-reactor-vendors accounting for alnost 99 percent o f th .? reactor-vendor rnarket, Westinghouse had a commanding compe:.i t3 ve posi tion. As of the end of 1971, Westinghouse had 41 reactor units operabic, under construction, or on ord r, accoun t i ng for 41,806 JtNo. It s three cornpati torn 30 The information and' statistics used in this portion of the brJ<f are taken from published statistics of units opor-

ab1< , under construction, or on order published by the A1.C Djvinien of Industrial Partici'ation.

l 6

vero in the following position: B&W had 16 units operable or under construction, accounting for 13,430 MWo; Combustion 1:ngineering had 13 reactor units operable, under construc-t ion , or can order, accounting for 11,570 MUo; while GE had 43 uni ts operabic, underconstruction, or on order, account-ing for 36,183 MFe.

If the product market, in anti-trust terms, was PMRn and DMPs, Mcstinghouse maintainn 41 percent of the narhet.  !!owever, there is ample authority that the relevant i

product parket is PHPs (See U.S. v. DuPont De Memours & Co.,

Fil ll . S . 377 (1955)), in which event Westinghouse's sh.iro of the varl.ct of unitn operable, under construction, or on order an of the end of the calendar year 3 971 is 63 percent.

To dt.nonstrate the recent surge of Westinghouse in the mar- -

het, one need only look at the reported sales of Westing-house for the period ended. September 30, 1971. During that ni nn-month period, Westinghouse sold 11- reactors with MWe va l us of 30,704, whj]r: Combuntion Enraineerine; nold nonc, ILLW nolti 2 irar a ],f:00 PMo value, and GE nold 4 vith a MWe value of 4,459. Again, if one assumes that the re3cvant market is PMPn and DFDs, Westinghouse has approximately 63 percent of the parket; or in other words, a percentage of the broadest parket identical to its percentage of the PWR market through the enr1 of 1971. Moreover, when one lookn merely at thq PWR

salen for t.hc period ended September 30, 1971, Westing-house'n sharr :he rarket is a commanding and renopolistic 8

86 percent. See the famous opinion of Learned Hand, U.S. v.

Aluminum Co. of America, 148 F.2d 416 (2d Cir. 1945).

We end this portion of the brief by asking-the Board the fo] lowing questions. If competition is a healthy and a iniccusary ingredient to nuclear safety, nhould this llearci permit Wentinghouse successfully to makc a claim of protirictary under circumstances wherein the Dourd will be ar. sitting Ucstinghouse in maintaining a competitive strangle-hold on the narhetplace? Or should this Board in the public interent e.nd given the public policy of free und open hear-inga on well an the policy of competition erbodicd in the II

!; herr:an 7ptit runt Act reject the Wentinghouso claim?

Al We c.:11 the Board's attention to paragraph 8 of Exbibit B hro t o. This rxhibit is the normal form of protect ive ,

.aut cr'r.,ont commonly used by Westinghouse in connect. ion with I itn c.tairs-of-proprictary. (See testimony of Weisomann, 1 Dorhet RM-50-3, Tr. 3844-3848.) The agreement requires pornonn who are consultantn- to Westinghoune to promise never 10 work for or reprenent a car Thus the very unt ,ol 1.he proprj etary agrecmont. 3 ; pet.i tor.an ant i-competi t.j vc act .

I

EVEN IF THE TEST TO BE APPLIED TO DETERMINE PROPRIETARY IS THE TEST EMBODIED IN THE FREEDOM OF INFORMATION ACT, WESTINGHOUSE MUST NEVERTHELESS PROVE THAT T*'E INFORMATION IS OF A UNIQUE OR SPEC _'.'.L CHARACTER IN TifE NATUI<E OF A TRAliE SECRET, THAT RELEASE '

OF Tl!E INFORMATION WOULD RESUI/P IN A COMPETITIVE DISADVANTAGE AND THAT THE PUBLIC INTEREST IS NOT COMPROMISED BY WITHHOLDING TIIE INFORMATION We do not see that the test embodied in the Freedom of Information Act is significantly different from the common law test which we have discussed in the previous section.

l The only difference micht be that any requirement of need ror documents is expressly climinated and that the Freedom

~~

of Information Act statutorily codifies the f act . hat the .

burden of proof is upon the Agency. See supra p. 9 n. 3.

A bare claim of confidentiality is not sufficient to mcot the requirements of the Freedom of Information Act tent. This is supported by the case law, other AEC rulings, anel by Wentinohnuno i1:scif.

12 Westinqhoune arcues at Paqc 19 of its Brief that a subpoena for documents directed to it is the same an a subpoena or requent for documents directed to the agency in possession of the documents. While we do not agree with this, phantas-maaorical conclusion, we would point ou_ that if Westinahouse is to adopt whatever benefits it nees in the Freedom of In formation Act, it must also be charaed uith the liabilities:

that is, need is not an issue, and Westinuhouse carries the burden of proof. Since 10 C.F.R. Part 9 is no more than an implementa t ion of the Freedom of I n format. i on Act , (10 C.F.R.

(Cont'd on p. 28)

't

- - - . - - ,.- , ,, , _ - v--- ,

Wentinnhouse implicitly admits this by virtue of the fact that the Weisemann Affidavit, no matter what it intends to do, docs not stop at mercly arguinn that the infor-mation in customarily held in confidence. Thus, paragraph 8 of the Weisemann Affidavit sets up the test for determining whether information is to be classified proprietary by Westinghouse. The subparagraphs of paragraph 8 do not deal t

with whether a document is customarily held in confidence.

Rather, the test ombodied in paracraohs 8 (a) through (f) of the Weisemann Affidavit are in reality a restatement of a portion of the traditional common law test, that is, that

~

12 (Cont'd from p. 27) 59.1) Part 9 may not be construed inconsistent with the Act.

Wes tinghousc's argument may be bottomed in 10 C.F.R. 59.4

-which provides:

"Any identifiable record, whether in 'the i posnr snian of the AP,C, its contract ors , its subconntractors, or others, shall be mado availab]e for inspection and copyinn pursuant to the ).rovisions of this part upon request of any member of the public."

Thus, if the Freedom of Information Act reaches documents in the possession or under the control of the AEC and Wes ti nghouse is within the meaning of the word "others ,"

then there might be some support for the Westinchouse argument. Ilowever , as is demonstrated in this section of our 13ri e f , the test pursuant to the Freedom of Information Act

-is not. satisfied by a.barc showing that the documents in qm n t inn art- contomarily held in c<.nfidener .

b ' * * .. 4 .

m_

t the information must be a variation of a trade secret and that its disclosure would result in competitive injury to Westinghouse. Thus, althouah Wes'inghouse's c counsel urges in i t t: firief t hat the test in limi'ted, Westinghouse i tself, by vi rtue of the Weisemann Affidavit, contracticts that reosi t ion .

Moreover, when this issue arose in the National ECCS IIcarings and Westinchouse made an identical argument, that is, that the Freedom of Information Act test was satis-fied by proof that the information was customarily held in confidence, Chairman Goodrich rejected the argument.13

_ "clIA fitMArJ coolmTCil: I did not understand them [ Wen-tinghouse] to cay that compe-titive advantage was the only element being the measure of reasonableness. They were talking about that i.n connection with the way in which Westing-house has framed its view.

Westinchouse really is talking about 13 Mentinghouse submitted into evidence at the National ECCS licarinos an affidavit by Mr. Weisomann identical to the A f fitlavi t ' at issue here.

rlw ,_ .

g 3

distinguishinq acpects of a process which it feo]s micht cive it competitive advantage.

I think the statute is clear.

The Freedom of Information Act - -

" t:R . CitCRI<Y: Thus far there is nothing by Westing-house in the record, sir. There's only their judgment that they agree with Mr. Cowan's assertion.

"rilATIGtAN GOODRICll: Well that's correct. But we are dealina with Mr. Cowan's assertion because that is all we have in the record so far.

"f tit. Clll;1t!'7: Right.

( llATli'IAN GOODRICII: And I take i t we're coinq to qct to that. But since that's all we have to go by,.my on]y comment is that the Board's orioinal inquiry into this

u. . . . - ... - - - - - - -. . . . . - -. -

- a ..

r I .

aren van unt:urtaken hon.unne f.hc IsonrJ i' believes that there should be some-thing on the record to sustain a claim of proprietary beyor.d the more asser-

, tion that one custorarily holds it i

in confidence." (Docket RM 50-1, Tr. 3610-11) f I.a t.c r on in the namo proceedinct when the Weinemann Affidavit j

'~

w.in a rain under discussion in connection with another Westing-houne claim o' proprietary, the Board again indicated that t he e'iaractor of information was important, since the Freedom of In formation Act does not protect information just because

.i'- is he.ld in confidence. In this instance, Mr. Cowan was arquinq t.hn t. HW' 7379-h (a documen t not. here at insuo 1.iut one t

wh ich Mr n t. inn'touco claims is proprict ary) , meets the test of peranraph 3 (c) of the Weisemann A'fidavit. Chairman

(;oeth i ch and :1r. Cowan had the follouinq co13 cquy:

'ci!A TJul GOODRICII: Can you indicate why such tests l

[the tests innbodied in WCAP 7379-L]

could not ba perfog1pd, or have not

[ ,

been perforned by aisy ot-her persons or organiza'. ions as far as you are aware?

s "M R . COWAN: Mr. Chairman WCAP 7379-L relates to singlo-rod tests and single-rod

~

tests have been performed by other organizations. These single-rod tests and the reports or the results here are not thonc of any other orcanization, however. There arc other organizations that have performed single-rod tests and have come up with their own data.

"CllAIRT@N GOODRICll: Well, is there any basis for surmizing [ sic]

that the results of these tests have

' a_n_y unicue quality that would distinnuish them from information tha t if r,obably ouaht to be in the_oublic anmain?"

(Docket Rm 50-1, Tr. 4443-44.)

As these quotations indicate, on one occanion, chni):.an Goodrich indicated that r. ore assertion of confidential-i t y u..n not on iorth. On the other occasion, Chairmann Goodrich ani:ce a rinontion which supports t he poni tion earlier tal:en by un in this nrief (suora at p.15) that one or the tests of proprietary is tha t:

, . - ......-. .. , -  : n_ =. . -  ; .- ..

e

m e

". . . it mest be of a charactor which does not occur te pcisons in the trade with knowledge of the state of the art or which cannot be evolved by these ski _11ed in the art from the theoretical description of the process or compilation or compendia of information or knowledoc.

Sarles Tarzian, Inc. v. Audo Service, Inc.,

166 P. Supp. 250, 255-59 (1) . C . S . D . Cal. 1958)."

opsa at p. 35.

On two oceanions, therefore, Chairman Goodrich re:Jected the notion that customarily held in confidence is the tent omhodied in the Freedom of Information Act and speci fically rejected the araumont being advanced here by Westin, house.

To set the matter to rest, the courts also reject oin t cet harni 110- Mon t i nerhouse ponit. ion ,

in lirintol-Myers co. v. P.T.C., 4 2 4 P . T.d 9 3 5 (D.C. C i r . 19 70 ) , the Court of Appeals for the District of Columbia had occasion to interpret the trado necret exemption contained in the Freedom of Information Act and relied upon 1,y Wntinabouse in support of its Motion. The Court of Appeals stated: '

"The fi rst exemption cited prot natn

' trado ;ccrets and commercia] or finan-cial infor mation obtainc<! from a person and privilccred or confidential. ' 5 U.S.C.

Section 552 (b) (4) . This provision serves the important function of protectinr1 the privacy and competitive noni tion of the L. _ _ _

i ..

citizen who off' ors information to assist ciovernment policy makers.

Nevert: braless , the statutory s ch 'r:e iloes not siermit. a bare :tain of con-t iderit i7e ii tv to immuniz ! a <:en cy TITos from scrutiny.

~

The DistT. ict Court in the first instance has the respon-nibility-of determining the validity and extent of the clain, and insuring that the exemption is strictly construed in light of the lenislative intent. The Court may well conclude that portions I of the requested material are protected, and it may be that identifying details n:. secret matters can be deleted from a document to render it subject to dis-closure. These judgments are possible j only after careful consideration of the partic.ular documents in cucation, and it is for this detailed analysis that we rcmand." d. at pp. 9 38-39. (Emphasis supplied.)

i. It ir clear in our judgment, in the implicit judgment-of

- ~  !

I br L' ine riann Af fidavi t, in t.hc judgment of Chairman Goodrich zu,d i , the juriqment. o f the Court of Appeals for the District r,f co.'umbia that the ] coal argument in the Westinghouse Brief in shicr nonsense.

The objective of the Freedom of Information Act u.:n te ward free disclosure of information and not toward rr rit r' crionr tmon di r.elosurc. The We<:linqhounn ]cyal tent w.>n 1.! pt rmit ii to wit.hbold any~infoimalion it-. wished to withhe Ld and no one would be able to review its claim pi.'.b,0 ly beyond .the barc fact of whether the document is "cu.ec -nri]y hold in confidence. " Th adoption of the Westino-h04w Lest would renper the Freedom o" Information Act

ems-

. - n nullity, and would ou "just bad law." Under no rational theory can' th e Westi nch ouse test be supported.

~We refer tho' Board generally to the legislative history of the Freedom of Information Act: H. Rep. 11 0 . 1497,

' 89th Conn. 2d.Sess. May 9, 1966; S. Rep. No. 813, 89 th Cong.

1::t Se ::: . - net ober 1, 39G5; and two Law Haview articles which we belleve ::uppo rt our position: Note, Freedom of

. ,J n f_o rya t i on : The Statute and the Reculations, 56 Geo. L.J.

18 (1967); and Davis, The Information Act: A Preliminary Analygis2 34 U. Chi L. Rev. 761 (1967). See also Grumman I.i rcrtif t I:n 'ineer Corp. ,' v. Rencoctiation Bd. , 425 F.2d 578 (l'.C. Cir. 1970) (a case which also supports the pro-pi.*:it. ion ilut t the confidentiality exemption in the Freedom of iniorretion Ac:t can only be applied af ter a factual inqui ry);

- the Snprenn Court'n decision in Lear v. Adkins, 395 U.S. 653,

(> 5 6 (1969) where the Court called attention to its recent docinions:

". . . emphasizing the stronct Federal policy favorina free competition in ideas which do not merit patent protection;"-

ami R .Minnwire, -1:vidence Section 2285 (MefJauchton Rev. 1961).

See a l::o' Cons;umern Union of II.

S. v. Vot oran:. _Admini s tral ion, 303 F.,Supp. 796, 8 0 2-0,7, (D . C. S . D . N . Y . 1969).

u_

• r * - ww . s cose m.... . _ , _ , ,_ ,_ ,, _

We wish to state once again that we believe under the circumstances here presented the appropriate test to be applied to the Westinghouse Motion is that set forth in the previous section of our Brief. flowever, we believe that if Westinghouse wishes to embrace the Freedom of Information Act, it farcs no better since that Act requires similar proof as to the nature of the information, the competitive

., . consequences from its disclosure, and a comparison of the various competing interests in connection with the ultimate issue of withholding or disclosing the information.

i CUSTOMAHILY !!3LD IN CONFIDENCE -

AN UP-TO-DATE REPORT For some time now, we have been of the opinion that the test uracd by Westinghouse here and in other AEC proceedings, that is, that material is protectable if cus-tomarily held in confidence, is a sham. We fully believe that the test conceived by Westinghouse is not a sincere statrmont of Westinqhouse's view of the law, but rather is

- a market tool used hy Westinghouse to convince its customers and 1otential customers that it really has " secrets."

4

't r - , ._ _.

E' . i^

• • i .

-37 ,

,- a t

We fully believe that an. dquate investigation , ce a . ';

of the Westinghouse policy will demonstrate that, in. f act,, .

'Wentinqhouse does not generally hold in confid6nce/docu- '

ments it claims proprietary and that the ' test is the '

f #-

result 'bf a corporate judgment that if Westinghouse, vigorously g

~

asserts such a position, utilitids will " buy the myth," creat'ed by such an effort and believe that Westinghouse's research and development is superior to that of its competitors. .yL , .

We have an instahce whEch fu11y supports our, '

o' belief that the " customarily held in confidence" test 'is, in '

realit y, a sham. ,

Attached as Exhibit C to this Brief is an Affi- '

davit of counsel set. ting forth the ' foundation for attachments, e , .

1 and 2 to the Affidavit.- We believe the Board should very-seriouhly examine the Affidavit and its attachments. In 4

r. _

summary fashion, those materials point out the following:

. 1. Wantinghouse claims, pursuant to its custom-arily.. held in confidence test that WCAP 7495-L Vols. 1 and 2 are proprietary. The reports are dated April, 1970. ,,

3

2. The information Westinnhouse claims protect- '

able in the reports has to do with the parameters and'certain identifying factors of. certain rod transient bursh experi- ,

mon ts . - Westinghouse does not claim that the results of the ,

e e e t

e

( 0 h

i experiments are proprietary 'but merely certain critical descriptions of the experiments. See'WCAP 7495-L, Volumes 1 and 2 on file with the Atomic Enercy Commission; and attachment No. 2 to Exhibit C hereto;

3. Attachment No. 1 to Exhibit C is a report of '

a routino industry meeting on fueltrod failure where Mr.

Miller of Westinghouse disclosed information which is nga claimed to be proprietary and customarily held in confidence.

Page 3 of this report under the caption "R. J. Miller - (Wes tin'q -

house-NFD)" sets forth a description of certain critical paramotors of the rod burst experiments including internal ,

pr essures which Westinghouse claims in WCAP 7495-L arc propri etary . The letter is a summary of the meeting written '

by Mr. ftit tenhonne. The meeting had among it.s attendces not on.ly a reprencntative .from Westinqhouse but also a representative of each of its three major competitors.

a

4. A comparison of the information in the subject letter with the WCAP 7495-L report will demonstrate that the information Westinghouse claims customarily held in confidence was in fact released to its ' competitors.

We hasten to point out WCAP 7495-L is not th,o subject of the instant Motion. The relevanco, however, of l

. _ . - ,-p- -

A

2 s- .

. ., t

~39- ,.

Affidavit of counsel and its attachments (Exhibit C hereto) '

in th.it Ihoy provido a cogent' example that Westinghouse -

does not, in fact, customarily hold in confidence informa-tion it claims proprietary. .

Whatever the reason or explanation of the facts surrounding WCAP 7495-L and the Rittenhouse letter, it is .

clear that this Board may not approve the test Westing-house urqcs. Not only would such a test prevent any objec-tivo review but it would leave Westinghouse as the judge of its own cause and open the door to abuses of the proprietary privileqe of the kind revealed by Exhibit C hereto.

CONCLUSION

\

\

We believe that we have corr ectly set forth theg ,

state of the law with regard to the test of proprietary at, -

the comtvan Jaw and pursuant;to the Freedom'of Information

~

Act. The authoritics demonstrate that there must he a factual analysis surrounding any claim whi fh results in the 14 Mc note in passing that the Affidavit of Mr. Weisemann does not prove that the documents which are the subject -

of this Motion were submitted in confidence to the Com-

- mission and roccived in confidence by the Commission.

Thun, there is absolutely no competent proof in the'rocord at: 1o how or undefr what circumntances the Atomic Encroy Cemi:. ; ion rece:ivad the report.s or indeed whether it aqrces t.in t the ilocumentn i n. quention are enti t'l<:d t o protection.

Co npa.rt- 1.h. tent.inony of Dr. 1surJ"y (Exhibit A hereto) which'.o_nds to show that tho' Atomic Encrny Commission doos nf connider the documents in auestion proprietary.

3 prevention of a free.and open discussion of relevant infor-mation at a public hearing.

Westinghouse has not cited one authority which in directly in point. On the other hand, cach authority cited by Intervenors is directly in point, deals with-the issue, and specifically interprets Exemption 4 of the a Freedom of Information Act. There is no nuestion but that a

~.

the law requires a detailed factual analysis of the Westing-house claim and an ultimate balancing of the private and -

pub l i c i n t.oron ts . e- . ,

Whrin Mr. Weisomann was questioned at the National ,

1:CCS llearinqs regarding the Westinghouse test and the sub-  !

rtance of his Affidavit, he was asked the following question ,

and nave the following answer:

" BY MR. Cl!ERRY:

"O. Very well. ,

o Now, Mr. Weisomann dann Westinqhounc's test with respect to proprietary includo ,

a balancing, if you will, between compo- ,

titive advantage or disadvantage and the i

public interest?

l-

"A. No.a L

(Docket RM 50-1, Tr. 3817, February 24, 1972.

)

1

e t'

The insuo before the Board 'first arose in June, 1971. Westinghouse has had some eight months within which .

to pre .cnt its views to the Board and submit supportina -

4 data. On at 3 cast two occasions in late 1971, Westinghouse S.

t:c.s equested by the Board to submit fr.ctual nupport for .

its clain. Went.inghouse refused to submit any such factual ,

i. ' ,

suppor;. and instead urged upon the Board its unusual view '.

of the law. j We bc33cve the Board, if it accepts our view of q.

the law, has amp]c discretion to deny the Westinghouso Motion -g tor 1:econsideration and to orde-J the documents produced for .

vac at t he Pearing without any further consideration of ','

~

279 (1965).

the n:.tter . See FCC v. Schreiber, 381 U.S.

We holieve that the facts set forth in the attached exhibits amply <temonst rate that Westinghouse cou3 d not prove that Ih< de umnnt.narepropriotaryunderaproperviewofthelaw.j _

' We urge the Board to overrule the Ucstinnhouno ,

flotion and reaffirm its issuance of the subpoena without furthei proceedi.ngs . We also believe that such a result is in acenrdance with the law and is fair reward for a Company c'

l

.[ . .

4 4

which, as tir. Weisemann poinu out, has as a ceneral cor-Dorat.i . policy a disregard of "the public interost " - 34, RESPECTPULLY St1BMITTED,

. .y

,a.

!ri .

SAGTilAW VALLEY ET AL. {' ' '

INTERVENORS

• , s I /

l

, a By: l/

.L . I ,/ ~~~)

' Th tr Attorney V,. ' >

11y riin :1 ('he rry

isi I . . . a o r,5 109 !b ri b ih ni'.orn Street ch i c. . ,, 111.ij.in 60602 .

3 J 2/(> / I - 5 5 7'i 3

? 9 CERTIFICATION ,'.

e l. a .1 I cartify that a copy of the Brief of Saginaw Valley Intervuors in Opposition to Westinnhouse Electric- Cor-nen;ir4 m ':: Mol. ion for Reconcidoration of: Order Denyinei Won ti no-h<.u . ' -t;<.titen i <> 8 >otirib ihe Subponna innd itn'.,ttachmont.n were ni.i i i . .p , . r .o ; l . n :. p re pa i s !, and Jirolarrly addro:in <l 10 Meinherri of the

/. Lou i s - Sai ety and 1,ic:ennino Board, a31 counsel of record (includ-

'i no c. ' in :< 1: f or t.'en tinnhoune)', and the Secret.nry of tho,Atomig 4 t

- ! i r r Corr.minnion, on March G , 19 72.

< ."' s t N

Y'l A'l f- ip.h_.

, easmesW midae f **6te.-- e 'n. h . .smi- e 3%4me -wp.?'% -

'y pupg- g g m., g . m g , g% a , , gegy, .,y